Air Canada promises no layoffs for unionised employees under Canadian Airlines acquisition proposal

Airline Industry Information, Nov 4, 1999

AIRLINE INDUSTRY INFORMATION-(C) 1997-9 M2 COMMUNICATIONS LTD

Air Canada has promised airline unions that no unionized employees would be involuntarily laid off under its proposal to acquire Canadian Airlines. The carrier sent a letter detailing its commitment to union officials on 1 November and has extended the promise to Air Canada Regionals and Canadian Regional. Meanwhile, Onex Corp, which also has a proposal to restructure the Canadian airline industry through the acquisition and merger of Air Canada and Canadian Airlines, has received endorsement from the President of the Canadian Auto Workers (CAW) union after reaching a deal with the union regarding key employment issues according to Reuters. Despite the endorsement from the CAW president, another union official representing Air Canada employees at Toronto called the president's comments 'premature' and said that they were 'not supported by Air Canada union officers or members' according to Reuters. In related news, the chairman of Onex Corp has said he believes he can overturn Air Canada's recently-formed ten-year agreement with UAL Corp and Deutsche Lufthansa through the courts. According to legal advice received by Onex Corp, the pact in question is apparently an illegal attempt by Air Canada's board to entrench itself in order to make it more difficult and costly for Onex Corp to implement its airline restructuring proposal. Air Canada's shareholders are due to vote on the Onex Corp proposal on 8 November.